Dollar Traders Exercise Caution

U.S. Dollar traders continue to be in a holding pattern as they await a monetary policy decision from the Federal Reserve later this week, as well as the critical non-farms payroll data which will be released on Friday. Besides the Fed, market players are also looking ahead to monetary policy decisions from the European Central Bank and the Bank of England. While the Fed had been sending out signals that its quantitative easing scheme would be winding down, recent commentary from several Fed officials have thrown cold water on speculation that that withdrawal would be sooner rather than later, and investors are waiting for more definitive clues from the Fed as well as data which either supports or challenges that position. At this time, analysts don't expect any major policy shifts from either the ECB or the BoE

As reported at 10:45 a.m. (JST) in Tokyo, the U.S. Dollar Index inched away from its recently struck 5-week low of 81.499 .DXY and traded 0.2% higher at 81.711 .DXY. The EUR/USD pair traded at $1.3264, still failing to breach resistance at $1.3300. The USD/JPY traded slightly off Monday's 1-month trough of 97.61 Yen and was trading at 97.88 Yen.